DESPITE RECESSION, SMALL INVESTORS EARNED 3.2% PROFIT, INDEX SAYS

Despite a deepening recession that has dragged stocks down 20 percent or more from their July peaks, small investors managed to earn a small 3.2 percent profit in 1990, according to Money magazine's Small Investor Index.

The index, which tracks the performance of the typical individual's investments, beat the total return for the S&P 500 by six percentage points. Nonetheless, 1990's results were about six points below the 9 percent average annual increase the Small Investor Index has turned in for the past two decades.Overall for the year, the index rose by $1,350. That brings the value of the typical small investor's portfolio to $44,161. In December's final week, the index lost $30.

Gold, down 18.2 percent, showed the year's worst performance among the 10 categories that make up the index. But since gold constitutes less than 0.6 percent of the average portfolio, it cost small investors only $48.

Stocks, which account for 27.6 percent of the index, gave up $617 and were the source of almost all the losses individuals suffered. Small-company shares, down 17.5 percent, fared worst among equities. By contrast, big stocks fell only 2.9 percent.

Taxable bonds posted the best return of any category, up 8.1 percent. Tax-exempt municipals were close behind with a 7.5 percent gain. In the first nine months of 1990, individuals shifted $194 billion into bonds of all kinds, raising them from 23.2 percent of the average portfolio to 26.3 percent. For the year, bonds contributed $742.

The largest profits in dollar terms, however, came from certificates of deposit and money-market mutual funds. Those short-term investments, which make up 44.8 percent of the portfolio, earned a total of $1,266 in 1990. CDs, up 7.9 percent, were the best-performing category after taxable bonds, and money funds returned 6 percent.